Expression of gratitude
Entrepreneurship is a calling, both professionally and spiritually. We are extremely grateful to Lawrence Kirschbaum, chairman and CEO of Warner Books, for creating the Rich Dad series in such close collaboration with his company. We saw the twinkle of entrepreneurship in his eyes. His “It can be done!” attitude energized the people and the organization as a whole. While publishing may not be one of the cutting-edge industries of modern business, Lawrence Kirschbaum can be considered one of the cutting-edge leaders - and it was a true pleasure to work with him. Thank you Lorrie!
Robert Kiyosaki
Sharon Lecter
Introduction
What sets entrepreneurs apart from everyone else?
I consider one of the most anxious days of my life to be the day I left my full-time job and officially became an entrepreneur. I knew that from that moment on I would no longer have a regularly paid salary, nor would I have health insurance. There will be no more ballots, no more paid vacations.
From that day on, my steady income was zero. The fear of not having a permanent fix was one of the worst I have ever experienced in my life. The worst part was that I didn't know how long it would take for me to start making a steady income again.
The moment I left my full-time job, I realized why so many employees never become entrepreneurs. It's all about the fear of ending up completely without money... without any guaranteed income... without a constant salary. Very few people can work for a long period of time without getting paid. And this is precisely the quality
ism distinguishes entrepreneurs from all other people; we can say that this is one of the main differences - the ability to not lose your head and act wisely without having money.
But on the same day that I was left without a livelihood, my expenses increased significantly: as an entrepreneur, I had to rent an office, a parking lot, a warehouse, buy myself a desk, rent a phone number, pay for my business trips, hotel rooms, taxis, lunches, copies of documents, pens, paper, paper clips, all kinds of forms, postage, brochures and even the coffee I drink between jobs.
In addition, I had to hire a secretary, an accountant, a lawyer, an auditor, an insurance agent, and even a cleaner. Previously, my employer paid for all this. I realized how much I cost him when I was an employee. Only now have I realized that salaried employees cost their employers much more than the amount indicated on their paychecks.
And from here follows another difference between an employee and an entrepreneur. Entrepreneurs must know how to spend money even if they have no money at all.
Start of a new life
The day I officially retired from the company where I was previously employed, I was in the city of San Juan, Puerto Rico. It happened on June 1, 1978, in Puer-
In ToRico, I attended a ceremony honoring the best employees at the President's Club of the Xerox company. People from all over the world came here.
It was a very special meeting - a celebration that I will never forget. I just couldn't believe that Xerox would spend so much money just to honor its best salespeople.
But I was not happy at this holiday - difficult times were coming for me. During those three days while the celebration lasted, I only thought that, by leaving work, I was losing the stable income and social security that the company had previously given me.
I clearly understood that as soon as this whole party in San Juan was over, I would be left to my own devices. I will not be returning to work at the Honolulu branch office or any other Xerox division.
As I was leaving San Juan, our plane got into some kind of emergency. While landing at the Miami airport, the pilot asked passengers to fasten their seat belts, keep their heads in and prepare for a possible impact. I was already in a rather gloomy mood - after all, this was the first day that I became an independent entrepreneur - and now I was also being asked to prepare for death?
Yes, not a very good start for an independent business!
Thank God, nothing happened to the plane, and I safely flew to Chicago, where I was going to make the first presentation of my nylon wallets. I arrived at a Chicago shopping center late due to a flight delay, and the client I was supposed to meet - a representative of a large department store chain - left without waiting for me.
And again I thought: “I’m not starting my entrepreneurial career very well. If I can’t get this deal done, then my new business won’t bring in any income, I won’t get any money, and I simply won’t have anything to eat.”
And since I have always loved and love to eat, the prospect of being left without food worried me more than anything else.
Are there natural born entrepreneurs?
Are people born entrepreneurs or do they become adept at it through training?
When I asked rich dad what he thought about this, he said:
The question of whether people are born entrepreneurs or are specially trained in this business does not make sense. This is like asking whether people are born employees or become employees through training.
Rich dad then elaborated:
People are trainable. Therefore, they can be trained both to become entrepreneurs and to become employees. The reason why there are so many more employees than entrepreneurs is that our schools teach young people to be employees. In addition, most parents constantly tell their children: “Go to school so you can get a good job later.” I have never heard a parent say, “Go to school so you can be an entrepreneur.”
Employees are a new phenomenon
Hired workers are a new phenomenon. In an era when the economy was based on agriculture, that is, in the agrarian era, most people were self-employed entrepreneurs. Many of them were peasants and worked on the king's lands. However, they did not receive any salary. It was just the opposite: it was the peasants who paid the king a tax for the right to use his land.
Current page: 3 (book has 19 pages total) [available reading passage: 4 pages]
Rich Dad's First Lesson for Entrepreneurs
In order to create a successful business, you first need to just start some kind of business
Chapter 1. What is the difference between an employee and an entrepreneur
Start with the right mindset
When I was a teenager, my poor dad often said, “Go to school, get good grades, so you can find a good job with a decent salary.” Thus, he set me up in advance to become an employee in the future.
My rich dad, on the other hand, often said, “Learn to start your own business and attract the right people to it.” Thus, he encouraged me to become an entrepreneur.
I once asked rich dad what the difference was between an employee and an entrepreneur. He replied: “An employee seeks employment in a business after that business has already been built. And the work of an entrepreneur begins even before any business appears.”
The probability of failure is 99 percent
Statistics show that 90 percent of all new companies fail within the first five years. Additionally, 90 percent of the 10 percent of companies that survive those first 5 years also don't make it to their 10th anniversary.
In other words, approximately 99 percent of all new businesses fail within 10 years of their inception. Why? Although, in general, there are many reasons, some of them are the most important:
Our schools prepare students to become employees who will look for work, and not entrepreneurs who will create this work by organizing some new business.
The skills required to be a good employee have nothing to do with the skills required to be a good entrepreneur.
Many businessmen find themselves unable to build a real business. Instead, they work hard to create a place for themselves as employees. They can be considered more like self-employed employees than company owners.
There are many entrepreneurs who work longer in terms of time costs and receive less than their employees. And as a result, these people become so exhausted that they are forced to quit their jobs.
Many new entrepreneurs start a business without enough experience and money.
Many businessmen undertake to produce good products or provide much-needed services, but they lack the business acumen to organize a successful business.
To succeed you need to lay the foundations
My rich dad said, “Starting your own business is like jumping out of a plane without a parachute. Already falling in the air, the entrepreneur begins to “sew his own parachute,” counting only on the fact that he will have time to do this and the parachute will open before he hits the ground.” In addition, he said: “But if an entrepreneur fails to sew himself a good parachute and he falls to the ground with all his might, he will have no choice but to rise and climb into the plane again to repeat this attempt.”
Small cracks in a big dam
One of the reasons I failed so miserably with the nylon jogging boot wallet business is because I didn't pay enough attention to the little things. There is a certain truth in the old saying “the taller a person is, the more painful it is for him to fall.” My initially small wallet business began to grow so quickly that very soon its management exceeded the capabilities of the three entrepreneurs who founded the business. It turned out that instead of a business, we, like Dr. Frankenstein, created some kind of monster, although at that moment we did not understand this. In other words, our unexpectedly spectacular success hastened and aggravated the inevitable catastrophe. In fact, the main problem was that we simply did not understand that we had already approached the very threshold of this catastrophe. We thought things were going better than ever. We considered ourselves rich. We thought we were geniuses. We didn't worry too much about taking advice from outside experts (such as patent lawyers).
The three of us became thriving entrepreneurs very early on (some in our early thirties, some under thirty) and stopped thinking much about our business, preferring instead to party all night long. We thought we had already built a business. We believed that we were great entrepreneurs. We believed that our success had already gone down in history. We began to wonder and boast. Champagne flowed like a river. Very soon, each of us had expensive, fast sports cars and even more expensive, nimble girls. We were so blinded by success and money that we were completely unaware of the little cracks that began to form in the foundation of our business.
But the cracks grew - and eventually the entire dam collapsed. It fell apart like a house of cards and took us with it. We didn't have a ready-made parachute that we could deploy.
When success is too much
Hard work makes up for bad calculations
From the very beginning, a poorly conceived business can survive as long as the entrepreneur works hard and keeps everything under strict control. In other words, hard work can go some way to compensate for the shortcomings of a poorly designed business and keep it from failing. The world around us is chock-full of millions of small entrepreneurs who keep their failing businesses afloat only through hard work, willpower, belt-tightening and constant emergency situations. But the problem is that as soon as they stop doing this, their business will immediately fall apart and go to the bottom.
All over the world, businessmen, setting out to “faithfully serve” their business, kiss their wives and children goodbye. Many of them go to work believing that if they devote even more time and effort to their company, they will finally be able to solve serious problems - such as low sales, careless employees, incompetent advisers, lack of free funds for development business, price gouging by suppliers, demands from insurance companies and land owners for increased premiums, unfavorable changes in business regulations by the authorities, unexpected inspection visits, tax increases, double taxation, quarrelsome customers, customers unwilling to pay for goods received, and too there are few hours in the day, leaving no time to solve even a few of these problems.
As a rule, entrepreneurs do not understand that the difficulties that their business is now facing did not appear today or yesterday, but long before they started their own business.
And one of the main reasons for such a high level of failure among small businesses is simple exhaustion. It's too difficult to try to make money and continue on your path when most of your time ends up being completely occupied with something that doesn't bring in any income or even requires additional investment without any return. So if you're thinking about starting your own business, before you leave your current job, try talking to an entrepreneur about how much time that person is spending on business-related things that aren't bringing him or her any benefit. income. And at the same time, ask him how he copes with these problems.
As one friend of mine said, “I am so busy with issues related to my business that I simply have no time to make money.”
Does hard, never-ending work guarantee the success of your business?
A friend of mine left a high-paying job at a large bank in Honolulu and opened a small diner in one of the working-class areas of the city. He always wanted to become an independent entrepreneur and start his own business. At the bank, he was involved in issuing loans and saw that the richest clients were independent entrepreneurs. My friend wanted to join their ranks, so he quit his job and began to make his dream come true.
Every day, he and his mother had to get up at 4 a.m. in order to have time to prepare food for the workers who wanted breakfast. Both of them devoted all their efforts to work, limiting themselves in everything - just to be able to provide customers with the best breakfasts at lower prices.
A few years ago I stopped by to have breakfast with them and see how they were doing. My friend and his mother looked very happy and satisfied with both their clients and their work. “Someday, over time, we will expand our business,” my friend said. “And then we can finally hire someone to do the hard work for us.” But the thing is that this “someday” never came. His mother died, the diner closed, and my friend ended up working as a manager at a fast food restaurant. He became an employee again. The last time I saw him, he admitted to me: “The salary is small, but at least now I have free time.” In this case, we can say that his parachute did not open. This man hit the ground before he even had time to properly organize his business.
Many of you, I think, might be saying, “At least he tried,” or “It was just an accident. If his mother had not died, they would have been able to strengthen their business and eventually start making a lot of money,” or “How can you even criticize such hardworking people?” I fully share these feelings and do not intend to criticize anyone. Although I had little contact with this man, I always treated him very well. I knew that he and his mother were happy doing this work, but at the same time I still felt pain when I saw them exhausted day after day, making little progress.
I tell this story only to clarify the point with which I began. This business was doomed to fail even before that how they started it. They miscalculated everything before they left their previous job.
Are you running your business in your own best interests?
If stories of hard, hopeless work that end in failure or are doomed to fail, and jumping out of airplanes without a parachute and ending up hitting the ground frighten you, then you should not become an entrepreneur.
But if these cases intrigue you or make you think about how you might overcome difficulties if you take them as a challenge, then read on. At the very least, after finishing this book you will have a better understanding of what a businessman needs to know to be successful. You will better understand how to design, create, and build a business that can grow with or without your participation and that can provide you with wealth beyond your wildest dreams. After all, if you're going to jump out of a plane without a parachute, you have to hope to win big, if you win at all.
The work that an entrepreneur must do
The most important part of an entrepreneur's job begins before he even has his own business or hires anyone. This work consists in the fact that he must calculate everything well in advance and design his future business in such a way that he can
Involve a lot of people;
Bring benefits to clients;
Provide opportunities to be responsible citizens;
To ensure prosperity for everyone who works in this business;
Provide assistance in carrying out charity events;
And over time, begin to work independently, without requiring the constant participation of the entrepreneur who founded it.
Before a business even exists, a successful entrepreneur already creates it in his own mind and sees it in his mind's eye. This is what my rich dad believed the job of a true entrepreneur was.
Failures lead to success
After one of my discouraging business failures, I went to rich dad and asked him:
- Tell me, what am I doing wrong? I felt like I had worked it out so well this time.
“You probably didn’t think of something after all,” rich dad replied with a grin.
– So how many times do I have to go through this?! – I exclaimed. “I think I’m the biggest loser I know!”
Then rich dad said:
– Do you know what the difference between a winner and a loser is? The losers, having failed, lay down their arms and give up their business. And winners are willing to fail until they succeed.
For a while he rearranged the papers lying on his desk, and then looked at me and continued:
– The world is filled with people who want to be entrepreneurs. They sit behind desks, hold respectable-sounding titles such as vice president, branch manager or inspector, and some even take home a sizable paycheck. These people who want to be entrepreneurs dream of one day starting their own business empire and perhaps one of them will do so one day. But it still seems to me that most of these people will not do anything significant. Almost every one of them will find some excuse, some completely logical reason not to jump from the plane. For example, “I’ll do this when the children grow up,” or “First, I’ll need to get some training,” or “When I collect enough money, then...”
“But they will never jump out of a plane,” I said, summing up his thoughts. Rich dad nodded.
What kind of entrepreneur do you want to be?
Rich dad continued to explain that the world is populated by all types of entrepreneurs. There are entrepreneurs big and small, rich and poor, honest and crooked, working only for money and working for the sake of work, virtuous and sinful, not leaving their town and acting in the international arena, and, finally, successful and unsuccessful. At the same time he said: “The word entrepreneur has a wide range of meanings and means very different things and very different people.”
Cash Flow Quadrant
As I noted in the introduction, the Cash Flow Quadrant is designed to help us understand the types of people who operate in the business world and how they differ from each other in terms of technique, personality, and mindset.
The letter P denotes employees.
The letter C denotes those who provide themselves with work, representatives of small businesses or specialists.
The letter B denotes owners of their own business.
The letter I stands for investors.
For example, if we have a born employee, he will always repeat the same words, regardless of whether he holds the position of president of the company or a doorman. An employee can always be recognized by characteristic expressions like: “I’m looking for a reliable, profitable job.” The key word here is “reliable”. In other words, fear is what keeps him in this quadrant. And if such a person wants to move to another quadrant, then the matter for him does not come down to learning some new methods and gaining additional skills - most often this person needs to overcome an obstacle of an emotional nature.
A person from the S quadrant can be easily recognized by statements like: “If you want something done well, do it yourself.” The main difficulty for these people is to learn to trust others to do any responsible work and recognize that they can do it better than themselves. It is this distrustful attitude towards people that most often keeps them within the very narrow confines of a small business, since a more or less large business ultimately cannot be created if you do not trust any of your subordinates. When S-quadrant people grow in business, it is most often within companies organized as partnerships, which are a group of friends working together, each of whom is a typical S-quadrant professional.
People from the B quadrant are always looking for subordinates and trying to organize a well-functioning business system. They don't feel like they necessarily have to do all the work within a given business. Their job is to build a business that would do this work for them. A true B quadrant entrepreneur is able to grow his business anywhere, even around the world, while a C quadrant entrepreneur is most often limited to a narrow framework within which he can personally control and manage everything. But, naturally, there can be exceptions to every rule.
A person from the I quadrant - an investor - is looking for smart people from the S and B quadrants who would take care of his money and put the capital to work so that it grows and brings good income.
In teaching his son and me about business, rich dad taught us to first focus on creating a successful S-quadrant business that could eventually be expanded into a B-quadrant business. And that's what this book is about.
What type of business are you going to create?
As part of our preparation as entrepreneurs, rich dad encouraged his son and me to explore as many types of businesses as possible. He said, “How can you become an entrepreneur and develop your own business if you don’t know anything about what types of businesses and entrepreneurs there are?”
Entrepreneurs who hire themselves
Rich dad never tired of saying that many entrepreneurs are not actually business owners at all, but people who hire themselves to run a business—so they don't own the business, they only work in it. He said: “You probably hired yourself if the name of your business bears your last name; if your income stops coming in as soon as you stop working; if you meet your clients in person; if employees can come to you with any problem. Often, you may consider yourself hired when you are the most experienced, most talented, and most educated person in your organization.”
This doesn't mean that rich dad had anything against businessmen who hire themselves. He just wanted us to understand the difference between entrepreneurs who own their own business and those who have a workplace in that business. Various consultants, musicians, actors, cleaners, owners of small restaurants, shops and shops - as well as most other owners of small business companies - fall into this category of people who do not run a business, but simply have a workplace in their own business, and are in this regard typical representatives of the C quadrant.
The main point that rich dad made about the difference between self-employed entrepreneurs and true entrepreneurs who build big businesses is that many entrepreneurs of the first type are unable to turn a small company into a large one in any short period of time. In other words, their main obstacle is the need to move from the S quadrant to the B quadrant. Why? Again, the answer is that their business is usually poorly planned to begin with. Therefore, he is doomed to vegetate.
Rich dad started out as a self-employed S quadrant entrepreneur. But at the same time, in his mind, he was constantly focused on the fact that in the future he would create a truly big business, within which he would manage people who were more experienced and endowed with greater abilities than himself. And he continuously calculated and refined the B quadrant business, so that - before actually starting it - he was able to tailor his S quadrant business so that it grew and naturally became a B quadrant business.
Professionals and people related to a profession
Rich dad also wanted us to know how many professionals—doctors, lawyers, accountants, architects, plumbers, and electricians—organize their businesses by employing themselves because of the nature of their profession or work practices. The fact is that these professions require special licenses from the authorities to work.
This category also includes professional sales agents, many of whom have special licenses as independent consultants, such as real estate, insurance, or securities. In fact, most of them are technically self-employed, or (which is the same thing) independent contractors.
The problem with this type of business is that with this type of business you don't have a company to sell because it really comes down to the personality of the owner. And often such companies have virtually no assets. Their only asset is the owner. If such a company can be sold, then it usually will not get more for it than for a similar mid-level company managed according to the true principles of the B quadrant. In addition, when selling his company, the owner often agrees to stay on to help him further function normally. In essence, this is a typical example of a manager turning into an employee.
According to rich dad, it is not worth working hard for because there is no accumulation of assets. That's why he advised his son and me never to aspire to become employees. He said, “Why work so hard if you end up creating nothing worth owning?”
Later in this book, we'll look in detail at some of the ways that these types of entrepreneurs can create assets for themselves—assets that will grow over time and that they can then sell to someone else.
"Business for Mom and Dad"
A very significant proportion of firms are known as “mom and pop businesses.” They received this name because most often we are talking about family firms. For example, my mother’s mother once owned a small grocery store, in which all family members worked a little.
A big obstacle to the growth of this type of business is the influence of family relationships. Many entrepreneurs do not hesitate to involve their children in this business, giving them responsible positions, even when they do not understand anything about it - according to the principle “well, how can you not please your loved one.” But it often happens that children do not share their parents' passion for a given business or they simply do not have the entrepreneurial abilities necessary to manage a business.
Franchises
Franchises, such as McDonald's, are theoretically a business that can be purchased ready-made, so to speak, on a turnkey basis. This company is able to sell a ready-made business to any person who does not want to go through the inevitable creative and organizational phase when creating it. It's like becoming an entrepreneur by magic. Another advantage of good franchises is that banks are usually more willing to lend to someone buying a franchise than to someone who wants to start a business from scratch. In this case, it is more convenient for banks to conduct business, since they have already collaborated with other buyers of the same franchises, and, in addition, they believe that proprietary training programs will certainly help a newly minted entrepreneur get on his feet and thus significantly reduce the risk that he will go bankrupt.
But the most important problem when purchasing such well-known franchises is that they are very expensive and place the entrepreneur in strict limits. Franchises are a type of business in which legal issues play an important role and which can force its owner to become involved in litigation. And such processes can be classified as the most slippery that exist in the business world.
In such cases, one of the main reasons for the clashes is that the people buying the franchises do not want to run their business the way the creators and owners of the franchise require. Another reason is that if the buyer of a franchise cannot achieve financial success, he may want to pursue a claim against the company that sold the franchise. If you have no desire to follow this path, then it is better for you to create some kind of your own business.
Network and direct marketing
Network and direct marketing, according to many entrepreneurs, are the fastest growing business models in the modern world - but at the same time the most controversial. They still cause a strong negative reaction among many people: these people claim that network marketing is nothing more than a regular pyramid scheme. But in fact, the largest pyramids in the world are just traditional corporations, in which there is one person at the top, and all the other employees and workers are at the bottom.
Anyone who wants to become an entrepreneur cannot ignore the network marketing business. Some of the largest companies on Fortune magazine's list distribute their products through network or direct marketing.
We do not engage in network or direct marketing, but we have a positive attitude towards these types of businesses. People who want to become entrepreneurs, before leaving their current job, should consider pursuing these options and joining some company operating under this scheme. Why? Because many of these companies can help you achieve immediate sales, help you build your business, and help you develop leadership skills. You won't find such opportunities anywhere else. One of the most valuable things about joining a reputable organization is that you will be able to quickly learn how to change your mindset and also gain self-confidence - both of which are absolutely necessary for any entrepreneur. You will also become more familiar with the systems that help you build a successful business. Moreover, all this can be done for a very reasonable fee, while the acquired knowledge can be truly invaluable. (To better explain the benefits of skills that can be gained from these types of businesses, we wrote a little book called Business School.)
If I were to start my entrepreneurial career again, I would start with network or direct marketing - not so much because it can make a lot of money, but because these types of marketing can provide truly world-class training that is in no way inferior to that which Rich dad once gave it to me.
How to steal without breaking the law
One of the most interesting conversations Mike and I had with rich dad was how some entrepreneurs steal from other entrepreneurs. As an example, rich dad told a story about an accountant. One fine day, he left the company he worked for and started his own business, attracting clients from his former company. In other words, this accountant slammed the door, but did not forget to take their business with him. About this, rich dad said, “Although there is nothing illegal here, it is still theft.” While this could be considered a form of planning for a future business, it is clear to me that rich dad would not want his son and I to have anything to do with this type of “entrepreneurship.”
Entrepreneurs with a creative approach to business
Rich dad wanted us to become creative entrepreneurs, like Thomas Edison, Walt Disney, or Steven Jobs. He said: “It’s so easy to be a small, run-of-the-mill entrepreneur, like those family sandwich businesses! It is also not difficult to engage in trade or provide some professional services, such as those provided by plumbers and dentists. It's easy to become a successful entrepreneur by taking over or copying some good idea that someone else has and then going against the person who created it.” These are the people I met when I started producing nylon wallets and became a pioneer in this field. Once we created a market and attracted attention from customers to new products, competitors appeared out of nowhere, copied my methods exactly, and then simply crushed my small company. Of course, I can't blame them. I have only myself to blame because, again, it was all about me not thinking through and designing my business well before I started it.
The title of Robert Kiyosaki's book "Before You Start Your Business" is very expressive and speaks for itself. The author, as an experienced businessman, shares his secrets with those who want to do business. Remembering himself in his younger years, Kiyosaki understands how afraid young entrepreneurs are to embark on an independent path, risking being left without a constant source of income. Therefore, he is very willing to give advice, which is very important to listen to before starting your own business.
Robert Toru Kiyosaki, when starting a business, like many aspiring businessmen, was forced to face a lack of financial resources, significant waste and lack of profit for a long period. He, being an inexperienced businessman in his youth, made mistakes that he now wants to warn a new generation of enterprising people about. Over the years, having gained valuable business experience, he became a significant person. Having withstood all life's difficulties, wise by experience and circumstances, Kiyosaki encourages young people not to be afraid to take risks, especially when the risk is justified. After all, in the end you can build your own empire and never again depend on other people. For everyone who has an entrepreneurial spirit, for everyone who no longer wants to be subordinate, for everyone who has a dream, this book is written. Valuable advice from business gurus will help budding businessmen implement their projects so that they become successful from the very beginning. The book is written in easy language, every word is inspiring. Because reading the stories of currently successful people and understanding that failures also happened to them means being inspired and acting, despite all sorts of negative life circumstances
Entrepreneurship is a calling both professionally and spiritually. It is a fire that burns deep within, disregards the inequality of initial conditions, creates leaders among us, allows us to quickly realize our dreams and build our future.
The book “Before You Start Your Business” is a wonderful gift for aspiring entrepreneurs around the world, for all those who do not want to give up on their dreams. I am grateful to those people who have inspired me to continually strive for change and help others in this important matter - to learn to challenge the prevailing circumstances and persevere in the chosen path.
Thank you!
Robert T. Kiyosaki
Introduction. What sets entrepreneurs apart from everyone else?
I consider one of the most anxious days of my life to be the day I left my full-time job and officially became an entrepreneur. I knew that from that moment on I would no longer have a regularly paid salary, nor would I have health insurance. There will be no more ballots, no more paid vacations.
From that day on, my steady income was zero. The fear of not having a permanent fix was one of the worst I have ever experienced in my life. The worst part was that I didn't know how long it would take for me to start making a steady income again. This may take years. The moment I left my full-time job, I realized why so many employees never become entrepreneurs. It's all about the fear of ending up completely without money, without any guaranteed income, without a constant salary. Very few people can work for a long period of time without getting paid. And it is this quality that distinguishes entrepreneurs from all other people; we can say that this is one of the main differences - the ability to not lose your head and act wisely without having money.
But on the same day that I was left without a livelihood, my expenses increased significantly: as an entrepreneur, I had to rent an office, a parking space, a warehouse, buy myself a table and a lamp, rent a telephone number, pay for my business trips, hotel rooms, taxis, lunches, copies of documents, pens, paper, paper clips, all kinds of forms, postage, brochures and even the coffee I drink in between work. In addition, I had to hire a secretary, an accountant, a lawyer, an auditor, an insurance agent, and even a cleaner. Previously, my employer paid for all this. I realized how much I cost him when I was an employee. Only now have I realized that salaried employees cost their employers much more than the amount indicated on their paychecks.
And from here follows another difference between an employee and an entrepreneur. Entrepreneurs need to know how to spend money even if they have no money at all.
Start of a new life
The day I officially retired from the company where I was previously employed, I was in the city of San Juan, Puerto Rico. This happened in June 1978. In Puerto Rico, I attended a ceremony honoring the best employees at the Xerox President's Club. People from all over the world came here.
It was a very special meeting - a celebration that I will never forget. I just couldn't believe that Xerox would spend so much money just to honor its best salespeople. But I was not happy at this holiday - difficult times were coming for me. During those three days while the celebration lasted, I only thought that, by leaving work, I was losing the stable income and social security that the company had previously given me. I clearly understood that as soon as this whole party in San Juan was over, I would be left to my own devices. I will not be returning to work at the Honolulu branch office or any other Xerox division.
As I was leaving San Juan, our plane got into some kind of emergency. While landing at the Miami airport, the pilot asked passengers to fasten their seat belts, keep their heads in and prepare for a possible impact. I was already in a rather gloomy mood - this was the first day I became an independent entrepreneur - and now I was being told to prepare for death! Yes, not a very good start for an independent business!
Thank God, nothing happened to the plane, and I safely flew to Chicago, where I was going to make the first presentation of my nylon wallets. I arrived at a Chicago shopping center late due to a flight delay, and the client I was supposed to meet, a representative of a large department store chain, left without waiting for me. And again I thought: “I’m not starting my entrepreneurial career very well. If I can’t get this deal done, then my new business won’t bring in any income, I won’t get any money, and I simply won’t have anything to eat.” And since I have always loved and love to eat, the prospect of being left without food worried me more than anything else.
Are there natural born entrepreneurs?
– Are people born entrepreneurs or do they become experts in this business through training?
When I asked rich dad what he thought about this, he said:
– The question of whether people are born entrepreneurs or are specially trained in this business does not make sense. This is like asking whether people are born employees or become employees through training.
Rich dad then elaborated:
– People are trainable. Therefore, they can be trained both to become entrepreneurs and to become employees. The reason why there are so many more employees than entrepreneurs is that our schools teach young people to be employees. In addition, most parents constantly tell their children: “Go to school so you can get a good job later.” I have never heard a parent say, “Go to school so you can be an entrepreneur.”
Employees are a new phenomenon
Hired workers are a new phenomenon. In an era when the economy was based on agriculture, that is, in the agrarian era, most people were self-employed entrepreneurs. Many of them were peasants and worked on the king's lands. However, they did not receive any salary. It was just the opposite: it was the peasants who paid the king a tax for the right to use his land. The category of people who were not peasants included artisans or shopkeepers, that is, as we would call them now, representatives of small businesses. These were butchers, bakers, tinsmiths, etc. A reminder of the business they were engaged in is now very often found in the surnames of their descendants. This is why so many people now have the surname Smith (in memory of their ancestors - the village blacksmiths), Baker (in memory of those who owned a bakery) and Farmer (their family business was once farming). But they were all self-employed entrepreneurs, not employees. Most children who were raised in families of entrepreneurs follow in the footsteps of their parents and also become entrepreneurs. And this once again proves that everything depends on training.
But when the industrial era arrived, the need for hired workers increased sharply. In response, the government set out to provide mass education for children and borrowed the Prussian education system, which became the model on which most school systems in the modern Western world are based. If you study the philosophy on which this system was built, you will see that its goal was to raise soldiers and hired workers, that is, people who would strictly follow orders and do only what they are told. The Prussian education system is a very good system designed for mass training of hired workers. In essence, it forms the basis of school education.
Robert Kiyosaki, Sharon Lecter
BEFORE STARTING YOUR BUSINESS
Expression of gratitude
Entrepreneurship is a calling, both professionally and spiritually. We are extremely grateful to Lawrence Kirschbaum, chairman and CEO of Warner Books, for creating the Rich Dad series in such close collaboration with his company. We saw the twinkle of entrepreneurship in his eyes. His “It can be done!” attitude energized the people and the organization as a whole. While publishing may not be one of the cutting-edge industries of modern business, Lawrence Kirschbaum can be considered one of the cutting-edge leaders - and it was a true pleasure to work with him. Thank you Lorrie!
Robert Kiyosaki, Sharon Lecter
Introduction
What sets entrepreneurs apart from everyone else?
I consider one of the most anxious days of my life to be the day I left my full-time job and officially became an entrepreneur. I knew that from that moment on I would no longer have a regularly paid salary, nor would I have health insurance. There will be no more ballots, no more paid vacations.
From that day on, my steady income was zero. The fear of not having a permanent fix was one of the worst I have ever experienced in my life. The worst part was that I didn't know how long it would take for me to start making a steady income again.
The moment I left my full-time job, I realized why so many employees never become entrepreneurs. It's all about the fear of ending up completely without money... without any guaranteed income... without a constant salary. Very few people can work for a long period of time without getting paid. And it is this quality that distinguishes entrepreneurs from all other people; we can say that this is one of the main differences - the ability to not lose your head and act wisely without having money.
But on the same day that I was left without a livelihood, my expenses increased significantly: as an entrepreneur, I had to rent an office, a parking lot, a warehouse, buy myself a desk, rent a phone number, pay for my business trips, hotel rooms, taxis, lunches, copies of documents, pens, paper, paper clips, all kinds of forms, postage, brochures and even the coffee I drink between jobs.
In addition, I had to hire a secretary, an accountant, a lawyer, an auditor, an insurance agent, and even a cleaner. Previously, my employer paid for all this. I realized how much I cost him when I was an employee. Only now have I realized that salaried employees cost their employers much more than the amount indicated on their paychecks.
And from here follows another difference between an employee and an entrepreneur. Entrepreneurs must know how to spend money even if they have no money at all.
Start of a new life
The day I officially retired from the company where I was previously employed, I was in the city of San Juan, Puerto Rico. It happened on June 1, 1978, in Puerto Rico, I attended a ceremony honoring the best employees at the Xerox President's Club. People from all over the world came here.
It was a very special meeting - a celebration that I will never forget. I just couldn't believe that Xerox would spend so much money just to honor its best salespeople.
But I was not happy at this holiday - difficult times were coming for me. During those three days while the celebration lasted, I only thought that, by leaving work, I was losing the stable income and social security that the company had previously given me.